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Hi, I’m Lombard and I’m a rent seeker. I’m on the wagon, but could easily backslide. Then I’d be in the same boat as Elliott Associates. My financial intoxicant back in the day was buy-to-let property. For the activist investor it is “bumpitrage” — the practice of buying into a company subject to a takeover offer and squeezing a small bump in the price from the bidder.

Elliott’s good at it. On Thursday, South Africa-rooted retailer Steinhoff agreed to pay 5p more per share for UK bargains store chain Poundland, taking the price to 227p. Last month, brewer AB InBev sweetened its offer for rival SABMiller by £1 to £45 per share. In both cases, Elliott had bought stakes big enough to make it worth placating.

Economists define “rent seeking” as an activity that appropriates value but does not add to it. It’s a pejorative phrase. You might apply it to a short-term investor that turns the screw on a bidder already offering a decent price. Or it might be a landlord extracting good returns from a London house to which he contributes little beyond a few coats of magnolia emulsion.

The contrast is with a longer-term investor that shakes up a complacent fund manager, as Elliott did at Alliance Trust, or a property owner who improves rather than maintains.

I’m comfortable sharing my feelings with the group because I know you won’t judge either of us the way readers of The Economic Journal might. Let he who is without sin, and all that.

Fate has a way of catching up with rent seekers, I figure. The chancellor takes away the tax breaks benefiting small BTL investors and capital values dip. Or a big company calls a bumpitrageur’s bluff, labelling an offer “full and final” without any uplift, inspiring others to do the same.

Burning platform

We said it wouldn’t be pretty, and it isn’t, writes Kate Burgess. Legal & General is flogging
Cofunds, about the UK’s biggest fund platform, for a mere £140m. Three years ago, Nigel Wilson, L&G’s boss, paid the equivalent of £175m for it. Cofunds tends £77.5bn in funds, yet still hasn’t made a sous.

The 2013 acquisition looks like an misconceived attempt to emulate Hargreaves Lansdown, the FTSE 100 platform operator that made billionaires of its founders.

The deal was ill-timed because regulators were already picking apart the cost of retail investment and competition was cranking up. Few platforms like Cofunds catering to financial advisers, who can take their pick, are profitable. If L&G’s plan was to sell enough of its own funds to make up the margins, it failed.

It is a relief, therefore, that Mr Wilson is selling the business to Dutch insurer Aegon rather than spending shedloads updating the IT, even if it crystallises a £65m loss.

Comparing Cofunds with HL may have been tempting but it was wrong. HL deals with consumers and although it has just £55bn under administration, it skims margins of 67 per cent. Rivals will always have a job overtaking HL, which established a grip on consumers decades ago. The 1980s bedroom-start up may not be sitting pretty, but it is sitting comfortably.

Chinese banana plant

At last, some good news about Hinkley Point. A senior adviser to the Chinese partner in the £18bn power plant has been indicted on nuclear espionage charges in the US, it has emerged.

China General Nuclear Power therefore appears well placed not only to bring the best of Chinese nuclear technology to the UK, but the best of American nuclear technology, too.

Britons are increasingly sceptical about Hinkley Point. It isn’t just the cost. They are also wary of entrusting nuclear security to a partner from a country whose culture is so alien.

Lombard speaks, of course, of EDF. Hinkley Point’s second foreign collaborator is from France. This, shockingly, is a nation where the accordion is regarded as a source of entertainment rather than an instrument of torture.

Understandably, Theresa May has postponed a decision on Hinkley Point, lest it helps French spies obtain British technological secrets. These include the folding mechanism of Brompton bicycles and the technique by which Emma Bridgewater covers its pottery in polka dots.

The realisation China General may be able to deploy counter spies to neutralise a Gallic threat should stiffen Mrs May’s resolve to press ahead.

The UK has much in common with China. Hereditary elites run both countries, where show trials are popular (in the UK, via parliamentary select committee and The Jeremy Kyle Show) and spies are traditionally communists.

Amateurism is another apparent similarity between our espionage initiatives. A Chinese citizen arrested in April in New York allegedly used the code words “the banana” to describe military-grade materials he coveted. Johnny English, eat your heart out.

jonathan.guthrie@ft.com

Cofunds: kate.burgess@ft.com